By: Bivins S.B. No. 405
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the distribution of the foundation school fund and to
1-2 tax and revenue anticipation notes made necessary in part by such
1-3 distribution.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subsections (b), (c), and (d), Section 16.260,
1-6 Education Code, are amended to read as follows:
1-7 (b) Payments from the foundation school fund to each
1-8 category 1 school district shall be made as follows:
1-9 (1) 15 <21> percent of the yearly entitlement of the
1-10 district shall be paid in an installment <two equal installments>
1-11 to be made on or before the 25th day of September <and October> of
1-12 a fiscal year;
1-13 (2) 80 <57> percent of the yearly entitlement of the
1-14 district shall be paid in eight <six> equal installments to be made
1-15 on or before the 25th day of October, November, December, January,
1-16 <February,> March, May, June, and July; and
1-17 (3) five <22> percent of the yearly entitlement of the
1-18 district shall be paid in an installment <two equal installments>
1-19 to be made on or before the 25th day of February <April and May>.
1-20 (c) Payments from the foundation school fund to each
1-21 category 2 school district shall be made as follows:
1-22 (1) 22 <21> percent of the yearly entitlement of the
1-23 district shall be paid in an installment <two equal installments>
1-24 to be made on or before the 25th day of September <and October> of
2-1 a fiscal year;
2-2 (2) 18 <38> percent of the yearly entitlement of the
2-3 district shall be paid in an installment <four equal installments>
2-4 to be made on or before the 25th day of October <November,
2-5 December, March, and July>;
2-6 (3) 9.5 <seven> percent of the yearly entitlement of
2-7 the district shall be paid in an installment <two equal
2-8 installments> to be made on or before the 25th day of November
2-9 <January and February>;
2-10 (4) 7.5 <22> percent of the yearly entitlement of the
2-11 district shall be paid in an installment <two equal installments>
2-12 to be made on or before the 25th day of April <and May>; <and>
2-13 (5) five <12> percent of the yearly entitlement of the
2-14 district shall be paid in an installment <two equal installments>
2-15 to be made on or before the 25th day of May <June and August>;
2-16 (6) 10 percent of the yearly entitlement of the
2-17 district shall be paid in an installment to be made on or before
2-18 the 25th day of June;
2-19 (7) 13 percent of the yearly entitlement of the
2-20 district shall be paid in an installment to be made on or before
2-21 the 25th day of July; and
2-22 (8) 15 percent of the yearly entitlement of the
2-23 district shall be paid in an installment to be made on or before
2-24 the 25th day of August.
2-25 (d) Payments from the foundation school fund to each
2-26 category 3 school district shall be made as follows:
2-27 (1) 45 <21> percent of the yearly entitlement of the
3-1 district shall be paid in an installment <two equal installments>
3-2 to be made on or before the 25th day of September <and October> of
3-3 a fiscal year;
3-4 (2) 35 <57> percent of the yearly entitlement of the
3-5 district shall be paid in an installment <six equal installments>
3-6 to be made on or before the 25th day of October <November,
3-7 December, March, June, July, and August>; and
3-8 (3) 20 <22> percent of the yearly entitlement of the
3-9 district shall be paid in an installment <two equal installments>
3-10 to be made on or before the 25th day of August <April and May>.
3-11 SECTION 2. Section 404.121, Government Code, is amended to
3-12 read as follows:
3-13 Sec. 404.121. Definitions. In this subchapter:
3-14 (1) "Cash flow deficit" for any period means the
3-15 excess, if any, of (A) expenditures paid and transfers made from
3-16 the general revenue fund in the period, including payments provided
3-17 by Section 16.260, Education Code, over (B) taxes and other
3-18 revenues deposited to the fund in the period, other than pursuant
3-19 to Section 403.092, that are legally available for such
3-20 expenditures and transfers.
3-21 (2) "Committee" means the cash management committee.
3-22 (3) <(2)> "Credit agreement" means a loan agreement,
3-23 revolving credit agreement, agreement establishing a line of
3-24 credit, letter of credit, reimbursement agreement, insurance
3-25 contract, commitment to purchase tax and revenue anticipation
3-26 notes, purchase or sale agreement, forward payment conversion
3-27 agreement, contract providing for payments based on levels of or
4-1 changes in interest rates or currency exchange rates, or commitment
4-2 or other contract or agreement approved by the treasurer in
4-3 connection with the authorization, issuance, security, exchange,
4-4 payment, purchase, or redemption of an obligation, interest on an
4-5 obligation, or both.
4-6 (4) <(3)> "Tax and revenue anticipation notes" and
4-7 "notes" mean notes issued under this section, including any
4-8 obligations under credit agreements entered into by the treasurer
4-9 in connection with the issuance of the notes.
4-10 (5) <(4)> "Temporary cash shortfall" during any period
4-11 means the greater of (A) the <cumulative> cash flow deficit
4-12 forecast by the treasurer for the <at any time during a> period and
4-13 (B) <within a fiscal year in which> the cash balance of taxes and
4-14 revenues in the general revenue fund at the beginning of the period
4-15 that are legally available for expenditures and transfers included
4-16 in such cash flow deficit, other than pursuant to Section 403.092,
4-17 less the cash flow deficit for the period, and less<, as projected
4-18 by the treasurer, is insufficient to honor the authorized
4-19 expenditures from that fund during that period and to establish> an
4-20 amount reasonably required as a cash balance in the general revenue
4-21 fund, as determined by the treasurer, but not more than 10 percent
4-22 of expenditures and transfers made from the general revenue fund in
4-23 the fiscal year before the determination.
4-24 SECTION 3. Subsection (d), Section 404.123, Government Code,
4-25 is amended to read as follows:
4-26 (d) All notes must mature and be paid in full during the
4-27 fiscal biennium in which they were issued. The notes must be
5-1 signed by the governor. <The interest rate on the notes must be
5-2 set so that the amount equal to the total amount of interest to be
5-3 paid on the notes plus the costs of issuance of the notes does not
5-4 exceed the amount of interest that would be paid on the notes if
5-5 the interest rate on the notes were one percent less than one of
5-6 the following, as computed by the treasurer:>
5-7 <(1) the average interest yield being earned on funds
5-8 invested by the treasurer as of the date of the notes' issuance; or>
5-9 <(2) the projected average interest yield to be earned
5-10 on funds invested by the treasurer over the life of the note
5-11 issue.>
5-12 SECTION 4. Section 404.124, Government Code, is amended to
5-13 read as follows:
5-14 Sec. 404.124. Shortfall Forecast; Committee Approval.
5-15 (a) Before issuing notes the treasurer shall submit to the
5-16 committee a general revenue cash flow shortfall forecast, based on
5-17 the comptroller's most recent <anticipated> revenue estimate. The
5-18 forecast must contain a detailed report of estimated revenues and
5-19 expenditures for each month and each major revenue and expenditure
5-20 category and must demonstrate the maximum general revenue cash flow
5-21 shortfall that may be predicted.
5-22 (b) Based on the forecast the committee may approve the
5-23 issuance of notes and the maximum outstanding balance of notes in
5-24 any fiscal year. The outstanding balance may not exceed the
5-25 maximum temporary cash shortfall forecast by the treasurer for any
5-26 period in the fiscal year. The treasurer may not issue notes in
5-27 excess of the amount approved <amount of notes that may be issued
6-1 and determine whether the notes shall be sold on a negotiated or
6-2 competitive bid basis. If the committee determines that
6-3 competitive bids are appropriate, the underwriter of any notes
6-4 issued under this section shall be selected by the solicitation of
6-5 sealed bids and an appropriate bid notice shall be published at
6-6 least one time in one or more recognized financial publications of
6-7 general circulation published within the state and one or more
6-8 recognized financial publications of general circulation published
6-9 outside the state. Unless all bids are rejected, the underwriter
6-10 shall be selected from the bids received>.
6-11 (c) The committee may determine whether the notes shall be
6-12 sold on a negotiated or competitive bid basis. If the committee
6-13 determines that competitive bids are appropriate, the underwriter
6-14 of any notes issued under this section shall be selected by the
6-15 solicitation of sealed bids and an appropriate bid notice shall be
6-16 published at least one time in one or more recognized financial
6-17 publications of general circulation published within the state and
6-18 one or more recognized financial publications of general
6-19 circulation published outside the state. Unless all bids are
6-20 rejected, the underwriter shall be selected from the bids received.
6-21 The treasurer may not sell the notes in a manner not approved <not
6-22 approve the issuance of notes in excess of the amount reasonably
6-23 necessary to meet the temporary cash shortfall. The treasurer may
6-24 not issue notes in excess of the amount approved or sell the notes
6-25 in a manner not approved>.
6-26 SECTION 5. This Act takes effect September 1, 1995.
6-27 SECTION 6. The importance of this legislation and the
7-1 crowded condition of the calendars in both houses create an
7-2 emergency and an imperative public necessity that the
7-3 constitutional rule requiring bills to be read on three several
7-4 days in each house be suspended, and this rule is hereby suspended.